Corn
Price action: December corn futures fell 1 1/2 cents to $4.28 1/2 and nearer the session low.
Fundamental analysis: The corn futures market is seeing some mild profit-taking from the shorter-term traders early this week, following last week’s good gains. Solid losses in soybean and wheat futures markets today also limited buying interest in corn. The strong U.S. dollar index that today hit another 4.5-month high was a bearish outside-market element for corn futures today.
Bulls got no traction from USDA reporting a daily U.S. corn sale of 110,500 MT to Mexico for 2024-25. USDA also reported U.S. corn export inspections of 793,012 MT during the week ended Nov. 7, down 58,627 MT from the previous week but within the pre-report range of expectations.
World Weather Inc. today said South America corn-region weather “has been and will likely continue to be mostly good over the next two weeks. Parts of center west Brazil and northern center-south Brazil will continue to get frequent rain, maintaining saturated soil conditions and eventually raising some potential for local flooding. Southern Brazil, Uruguay, Paraguay and eastern Argentina will experience net drying during the next 10 days, although some timely rainfall is expected this weekend,” said the forecaster. Pro Farmer South American crop consultant Michael Cordonnier kept his Brazilian corn crop production estimate at 125 MMT.
USDA’s weekly crop progress reports are out this afternoon—delayed one day by the Veterans Day holiday Monday. The U.S. corn harvest is pegged at 95% complete as of Sunday, compared to 91% complete last week and 88% done at the same time last year.
Technical analysis: The corn futures bulls have the overall near-term technical advantage. A price uptrend is in place on the daily bar chart. The next upside price objective for the bulls is to close December prices above solid chart resistance at $4.50. The next downside target for the bears is closing prices below chart support at $4.09 1/4. First resistance is seen at last week’s high of $4.34 3/4 and then at $4.40. First support is at $4.24 and then at $4.20.
What to do: Get current with advised sales.
Hedgers: You should be 20% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 20% sold on 2024-crop.
Soybeans
Price action: January soybeans fell 11 3/4 cents to $10.10 1/2, closing nearer the session low, while December soymeal closed $2.20 lower at $292.90, marking a fresh contract low close. December soyoil plunged 191 points to 46.23 cents, marking the largest daily loss since July 26.
Fundamental analysis: Soybean futures extended Monday’s weakness, with heavy losses in soyoil futures and a surging U.S. dollar to a more than six-month high serving as an open invite for sellers. While today’s losses were quite notable, technical support stepped in to curb downside momentum and weekly export inspection data also proved supportive. Earlier today, USDA reported weekly soybean export inspections totaled 2.28 MMT (83.7 million bu.) during the week ended Nov. 7, down 29,945 MT from the previous week but within the pre-report range of 2.0 MMT to 2.45 MMT. Net inspections were also above year-ago for the same period and currently ahead of last year’s inspection pace by 6.0%.
Improving weather conditions in South America are seemingly outweighing USDA’s cut to domestic production last Friday. World Weather Inc. notes regular rounds of showers and thunderstorms will continue through the next two weeks in northern Brazil, maintaining or improving soil moisture and conditions for development, while central and southern Brazil as well as Paraguay will not be as wet as northern Brazil, with the region drying down at times. However, the forecaster indicates soil moisture in place and at least some rain should develop favorably, while fieldwork advances well around the precip. In Argentina, more sunshine than rain is expected over the next two weeks, allowing fieldwork to advance well around two rounds of timely and nearly widespread rain Friday into Monday.
USDA will update its weekly Crop Progress Report following the close, with analysts expecting soybean harvest to have been 97% complete as of Sunday, according to a Reuters poll of analysts.
Technical analysis: January soybeans ended the session off the intraday low, with support at the 10- and 20-day moving averages, currently trading at$10.07 1/4 and $10.00 1/2. However, stiff resistance at the 40-day moving average of $10.24 1/4, which has additional backing from the 100-day moving average of $10.38 1/2 continued to curb buyer interest. Bears continue to hold the near-term technical advantage and will continue to work toward breaching $10.00 as well as the August low of $9.73 3/4. Meanwhile, bulls will continue to battle the 100-day moving average in order to work toward the September high of $10.87 1/2, though interim resistance is layered at $10.27 1/2 and $10.44.
December soymeal futures edged to a fresh contract low in intraday trade, though support at $292.30 and $289.60 curbed selling efforts. Meanwhile, initial resistance stood at the 10-day moving average of $297.70. An extension lower will face additional support at $284.60, then at $284.00, while additional resistance stands at $300.00, then at the 20-day moving average of $304.90, again at $307.70 and the 40-, and 100-day moving averages of $315.80 and $317.70.
What to do: Get current with advised sales.
Hedgers: You should be 20% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 20% sold on 2024-crop.
Wheat
Price action: December SRW futures plunged 13 1/4 cents to $5.52 1/4, settling near session lows. December HRW futures dropped 13 cents to $5.46 1/2. December spring wheat futures fell 14 1/4 cents to $5.77 3/4.
Fundamental analysis: Wheat futures endured heavy selling pressure, breaking yesterday’s lows and closing at the lowest mark in over two months. Wheat futures have faced heavy selling as the dollar continues to march higher. The dollar index surged to the highest level since June today, supported by increasing long-term interest rates. Traders have been anticipating a rebound in exports as the world balance sheet continues to tighten. A stronger dollar makes U.S. origin wheat relatively more expensive, which has been weighing heavily on wheat futures. A tighter world balance sheet continues to garner more attention, but prices have yet to ration demand. Sustained selling pressure does not seem likely at this juncture as prices are at value levels.
USDA reported wheat export inspections of 347,321 MT (12.8 million bu.) during the week ended Nov. 7, up 141,523 MT from the previous week and near the upper end of the pre-report range of expectations from 175,000 to 350,000 MT. Inspections continue to run above the necessary pace to hit the current USDA export estimate. Historically, inspections bottom around this time of year and modestly work higher into the spring.
Winter wheat acres in the U.S. quickly went from drought to too wet. Much needed drying will occur in parts of the region where the heaviest rain fell recently, says World Weather Inc. Recent rains are expected to have boosted crop conditions to 44% “good” to “excellent” according to a Bloomberg poll. USDA is expected to report the winter wheat crop as 92% sowed in this afternoon’s report.
Technical analysis: December SRW futures led weakness today, cementing bear’s hold on the technical advantage. Downtrend support limited most losses today at $5.53, while additional weakness finds modest support at $5.50, then $5.45. Resistance comes in at $5.58 3/4 then the 10-day moving average at $5.67 3/4.
December HRW futures continue to undergo heavy selling pressure. Support at $5.43 1/2 limited the downside today, which is reinforced by support at $5.35. Meanwhile, bulls are looking to overcome support at the psychological $5.50 mark, which is reinforced by $5.60 1/2.
What to do: Get current with advised sales.
Hedgers: You should be 70% sold in the cash market for 2024 crop. You should have 20% forward sold for harvest delivery in 2025.
Cash-only marketers: You should be 70% sold for the 2024 crop. You should also be 20% sold for harvest delivery for expected 2025-crop.
Cotton
Price action: December cotton fell 92 points to 68.77 cents, closing near the session low.
Fundamental analysis: Cotton futures extended Monday’s losses, edging to a two-month low in late-morning trade as the U.S. dollar rocketed higher and equities turned lower in the wake of recent gains. Meanwhile, the natural fiber faced pressure as the marketplace continues to reel in the bearish effects of recent economic stimulus measures in China, which have failed to meet expectations and increase uncertainty around global demand. Moreover, OPEC lowered its global oil demand forecast for 2024 for the fourth straight month, indicating a slowdown in overall demand in the top oil importer, China. Cotton futures will likely continue to face pressure while China continues to battle persisting deflationary conditions.
USDA will release its weekly Crop Progress Report following the close, which will detail harvest progress. Some delays likely occurred as of late amid recent rains in West Texas, the Blacklands and areas of Georgia and South Carolina. World Weather Inc. reports concern over fiber quality in Texas and possible damage to crops as a result.
Technical analysis: December cotton futures ended the session below support at 69.12 cents for the first time in over two months, though additional support at 68.55 cents curbed an extension lower and will now serve as initial support. Conversely, initial resistance stood at the 10-day moving average of 69.98 cents, which is backed by the 20- and 100-day moving averages of 70.64 cents and 70.73 cents. A breach of initial support 68.55 cents will find additional support at 67.49 cents, then at the August low of 66.26 cents, while a move above the 20- and 100-day moving averages, will face further resistance at the 40-day moving average at 71.69 cents, then at 72.38 cents.
What to do: Get current with advised sales and hedges.
Hedgers: You have 15% of 2024-crop production hedged in December futures at 69.84 cents. You should be 35% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 35% sold on 2024-crop.